Labour is on track to secure a landslide victory this morning, as after 14 years of Conservative leadership, Sir Keir Starmer is set to step into the role of Prime Minister.
Following weeks on the campaign trail, and many new policy promises, Starmer celebrated the win by stating that the Labour Government would be “ready to serve our country, ready to restore Britain to the service of working people.”
With ambitious promises to build more than 1.5 million new homes, introduce comprehensive reform of the cumbersome planning system, and increase the amount of affordable housing available across the UK, industry experts shared their reactions to this news, explaining what a new Labour Government could mean for a troubled mortgage market.
Reaction:
Richard Harrison, Head of Mortgages at Atom bank:
“A General Election always brings with it a sense of uncertainty, so it’s welcome to have such a definitive result.
“The size of the majority should allow the new Government to push on with addressing some of the issues faced by the property market.
“There’s no question that we aren’t building enough homes to meet demand, so addressing the planning system will be crucial.
“In addition, I’d like to see time given to whoever is appointed housing minister, given the way it has been a revolving door in recent years – the outgoing Lee Rowley was the 15th housing minister since 2010.
“It will also be interesting to see the detail of the Freedom to Buy permanent mortgage guarantee scheme promised in the Labour Party manifesto, aimed at supporting borrowers with small deposits.
“Atom bank has long championed these buyers, with a focus on flexible criteria and competitive rates at 95% loan-to-value (LTV), so we welcome the prospect of more options for these borrowers.
“More than anything, I think the mortgage sector will relish some stability.
“The ongoing uncertainty of the last few years has taken a toll on borrowers, who today face higher interest rates when their finances are already stretched.
“Some economic calm, and the prospect of base rate cuts in the months ahead, will be welcome.”
Sam Mitchell, CEO of Purplebricks:
“The new Government made clear in its campaign that housing is a priority and it must now deliver on those promises.
“Lack of stock is the root cause of so much of the housing crisis and we must see progress towards the pledge to build 1.5 million new homes in the early weeks of the new Parliament.
“A focus on building affordable and social housing is a crucial step towards a healthy first-time buyers market, as is the government’s promise to make the mortgage guarantee scheme permanent for first-time buyers.
“Above all, the market craves a consistent policy towards housing over a sustained period.
“With 16 housing ministers since 2010, the industry is desperate for some certainty and clear strategic direction from the Government.”
Simon Brown, CE at Landmark Information Group:
“We welcome the new Labour Government and look forward to collaborating to enhance the housing market.
“As the largest property and land data business in the UK, Landmark has a strong history of working with the departments across Government to provide insights on market challenges and solutions.
“Labour’s ambitious plans to build 1.5 million homes and streamline planning processes are commendable.
“The current planning system is complex and fragmented, which hinders market efficiency.
“By leveraging the relevant data, we can identify areas of high demand and address bottlenecks, ultimately improving market clarity under Labour’s leadership.”
Jamie Jenkins, director of policy at Royal London:
“A widely overlooked commitment in Labour’s manifesto is its longstanding commitment to double the size of the mutual sector.
“In the UK, mutuals represent less than 10% of the market, compared to between 30% and 60% in many other developed economies.
“Mutuals provide an alternative for consumers, where profits can be shared with customers, as opposed to shareholders.
“The UK market would benefit from creating an environment where new and smaller mutuals can grow and compete on a level playing field with their shareholder-owned counterparts.
“One of the most important manifesto pledges from Labour for the financial services sector is its commitment to conducting a review of the pensions landscape.
“Pension assets are now considered a key ingredient in resolving the UK’s economic growth challenge and, as a result, have risen up the ranks of political priorities.
“But pensions are first and foremost there to provide people with an income in retirement.
“The two things are not mutually exclusive, but any review needs to take a more holistic, longer-term view, considering the needs of all stakeholders.
“And the new Government will undoubtedly want to build on the success of automatic enrolment, originally conceived under a Labour Government, rather than make rash decisions that risk dismantling it.”
Trevor Greetham, head of multi asset at Royal London Asset Management
“Markets aren’t hugely interested in the UK General Election but policy choices over the next few years will be critical with investors likely to face further bouts of inflation.
“In contrast to the situation in France, the outcome of the snap election in Britain was never really in doubt and macroeconomic policy differences between the main parties are, on the surface, minor.
“It’s a world away from 2019 when Boris Johnson faced up against Jeremy Corbyn with Brexit in the balance.
“Labour has inherited an unrealistically tight fiscal baseline for departmental spending and their manifesto offers little insight into how they will improve public services without a further substantial rise in taxes and/or debt, both already at a half century high as a share of GDP.
“Keir Starmer has proposed various measures to boost economic growth, which are welcome, but meaningful improvement may prove elusive if he sticks to his promise to keep Britain outside the EU Single Market and Customs Union, or a ‘Hard Brexit’ in 2019 parlance.
“Meanwhile, the battle against inflation is by no means won and an uncertain geopolitical backdrop, populism and a drop in fossil fuel capacity as we transition to net zero all point to further cost of living surges in coming years.
“If these are seen as ‘just’ spikes, the Bank of England is likely to accommodate them, and unanticipated inflation could help Labour with their fiscal conundrum by pushing incomes above tax thresholds and debasing the real value of Government debt.
“This would merely be a continuation of the way UK policymakers have responded to shocks over the last 20 years, from the Global Financial Crisis and Brexit to Covid and the Ukraine invasion.
“In every case, inflation was allowed to overshoot in order to avoid even more painful choices. This is why, as multi asset investors, we believe it makes sense to invest across a broad range of asset classes, including the likes of commodities that can rise in price when inflation hits.”
Matthew Robertson, co-founder and CFO of Valouran:
“A lack of planning resource has held the property industry back ever since the austerity measures were introduced post the great financial crisis.
“It is encouraging to read of Labour’s planned recruitment drive for an additional 300 planning officers, but with the mandate they have received from the electorate, I would encourage them to be more bold and ambitious, and to push through their plans to release lower quality green belt land.
“Only by doing so will they have a chance of making good on their target of building 1.5 million homes over the course of this parliament.”
John Fraser-Tucker, head of mortgages at Mojo Mortgages:
“Whilst a similar scheme is currently in place until June 2025, Labour has pledged to make the ‘Freedom to Buy’ scheme permanent.
“The scheme encourages mortgage lenders to accept a lower deposit as the Government offers to step in should the first-time buyer struggle to pay.
“The Government will step in and repay an element of what the mortgage lender would lose if the property was repossessed.
“For some, this might be their only path onto the property ladder. However, it’s not without risks.
“With a substantially smaller deposit, buyers may face higher mortgage rates, leading to larger monthly payments and potentially thousands more in interest over time.
“While this scheme offers a valuable opportunity, it’s important to weigh the long-term costs against the immediate benefit of homeownership.”
“First-time buyers also need mortgage rates to lower to help with their affordability. Five years ago, the average rate for a 2-year fixed mortgage rate at a 75% loan-to-value (LTV) was 1.9%.
“Today, that same mortgage product averages 5.97% – a significant increase that affects affordability.
“To put this into perspective, let’s compare two identical £200,000 mortgages over 25 years.
“With a 1.90% interest rate, you’d pay about £838 per month. But with a 5.97% interest rate, your monthly payment jumps to £1,278. That’s an extra £440 each month, which adds up to £5,280 more per year.
“There are, of course, many reasons for this – in the past five years, we’ve witnessed a global pandemic, a cost-of-living crisis and more, all of which have contributed to a rise in mortgage rates.
“First-time buyers are currently facing the hardest conditions in 70 years, so the newly elected Government need to address this issue head-on.
“It’s also important that their solutions are not just quick fixes as this could lead to unsustainable debt for first-time buyers.
“Instead, what they need is concrete, effective action that makes the dream of homeownership a realistic possibility.”
Sam Lindsay, mortgage planning advisor, My Mortgage Angel:
“When the news of the snap election came, many homeowners and aspiring movers took a wait and see approach to see if the new Government would bring some stability to the market.
“Now the results are in, the industry remains optimistic that this will bring the stability and optimism needed.
“The reality is that the property market is largely driven by interest rates, capital growth and house prices.
“Time will tell us a lot but the reality is the housing market desperately needs some impetus.
“The new Government needs to make some changes to get the market picking up pace again, and it needs to make those changes sooner rather than later.
“Changes to stamp duty would be welcomed, greater initiatives for both buyers and sellers alike and bringing a helping hand back to first-time buyers would be a great place to start.”
Robin Rathore, CEO, Bamboo Auctions:
“While we were certain about a Labour election victory, we’ve been fairly uncertain about how they will help solve some of the systemic problems in the housing and property market, so the first 100 days of Government will be crucial in setting out how serious Labour is about change and progress in the sector.
“We know that Labour want to build 1.5 million new homes, we know they are committed to removing no fault evictions and we know that Labour will let the 0% SDLT threshold for first time buyers fall back to £300,000 from £425,000.
“Whether you agree with these policies or not, at least the property sector now has clarity of vision and certainty of direction for the country for at least the next five years.
“This will create more stability, more confidence and ultimately more liquidity in the property market.
“At Bamboo, we’re looking forward to helping our agent partners take advantage of improving market conditions with our technology and customer success.”
Daniel Austin, CEO and co-founder at ASK Partners:
“Housing stands as a pivotal issue in the election fray, given its correlation with economic stability.
“Recent upticks in house prices and mortgage approvals hint at recovery, yet the persistent housing shortage threatens prolonged recession.
“The UK faces a crisis of affordability due to insufficient homes for rent and sale, negatively impacting GDP.
“Decades of social strain persist with little resolution in sight.
“We urge the implementation of a radical yet credible long-term plan to assuage market concerns.
“Their proposed target of 300,000 homes annually echoes longstanding government aspirations unmet since 2004.
“France’s surpassing construction efforts underscore the urgency, with Capital Economics estimating a need for 385,000 new homes yearly.
“Four primary factors underpin this crisis: over-reliance on major housebuilders, politicised planning discouraging development, net loss of social housing, and post-Brexit labour shortages.
“Addressing these roots is imperative to alleviate the affordability crisis.
“Reinvigorating SME housebuilders is pivotal. Incentives should facilitate access to opportunities, including allocating small land plots for development and streamlining planning permissions for brownfield sites.
“Boosting skilled labour domestically and reforming the planning system are equally crucial. Independent decision-making and private sector assistance can expedite approvals and reduce costs.
“Prioritising social housing and incentivising brownfield developments are essential steps toward sustainable growth.
“Lenders must offer flexible financing to smaller developers. Despite potential temporary unpopularity, a steadfast commitment to a pro-growth agenda is necessary.
“The unique challenges facing the UK demand decisive action. Embrace this opportunity to steer us toward a balanced and sustainable housing market, ensuring prosperity for generations to come.”
Nick Leeming, chairman of Jackson-Stops:
“A Labour victory may have been long expected but today’s confirmation of just how much the political pendulum has swung to the left marks a change of direction for the UK.
“While a new Government is now certain, much is still unknown about how much of Labour’s manifesto they will be able to implement, and how quickly.
“Optimism for some about the future is supported by our recent research which found that nearly a third of respondents believe a Labour Government will make home ownership more accessible.
“Significant policy changes have been lauded when it comes to the property market, particularly around housebuilding and making home ownership more affordable.
“Labour has pledged to build 1.5 million new homes within five years which would be the biggest boost to affordable housing in a generation by building on the grey belt and creating new towns.
“Our research also found that over a fifth believe building on brownfield land and low quality grey belt land would offer the biggest improvement to the housing market.
“But such an ambitious target will take significant time, resource and support to achieve, the property industry will be looking for further clarity but also the opportunity to engage with the government to bring Labour’s policies to fruition in a sustainable and effective way.
“For buyers and sellers in the short term the market is likely to remain on the same trajectory as the first half of 2024, the knowledge that a change of government was coming has avoided a cliff edge or need for immediate changes to be made. The property market can also take comfort in its resilience, having navigated changing Governments and policy changes time and time again.”
Richard Pike, chief sales and marketing officer at Phoebus:
“It will be a real long-term boost for the property industry if Labour kicks off in seriousness their ambitious housebuilding programme following the March budget, when they’ve had a chance to bed in.
“We’re sincerely hoping the Government takes a good hard look at the property industry and start mandating changes to digitise our house buying and selling process, which is currently so stressful that people are loathe to do it unless they have to.”
Guy Gittins, CEO of Foxtons:
“This morning’s news of Labour’s victory in the election should prove positive for the London sales market.
“Labour’s manifesto demonstrated a strong focus on business and economic growth, which is very promising.
“This focus, together with improving inflation figures and an anticipated rate cut later in the summer, should give both buyers and sellers confidence and result in good levels of activity in the market for the rest of the year.”
Mike Randall, CEO, Simply Asset Finance:
“The new government has no time to waste – the UK recovery is at risk of veering off the tracks and substantive action is required to avoid this happening.
“Front and centre needs to be ensuring that SMEs can sustainably and reliably drive productivity and growth. Without that, the economy could falter, and pledges on public services could become unachievable.
“There are without a doubt longer-term structural issues that need to be addressed, for which policies addressing late payments, planning reforms, and capital allowances can have a real impact.
“But in the shorter term, the truth remains that access to capital is all too often the core of the issue.
“Both the government and lenders have a responsibility to work hand-in-hand to deliver fast, innovative, and agile financing.
“Businesses need the reassurance that they have the necessary support to help them capitalise on opportunities as they arise, and the confidence to make the decisions that will enable them to thrive in the future and beyond.”
David Thomas, chief executive of Barratt Developments:
“The country urgently needs more new homes, of all types and tenures.
“We look forward to working with the new government to help them build 1.5 million homes across the next parliament, unlocking planning and helping first-time buyers access affordable finance, ultimately helping more families own a high quality, sustainable, new home.”
Nick Hale, chief executive officer at Movera:
“There is no doubt this has been an historic election, and a landslide victory for Labour.
“Big challenges such as affordability lie ahead for the new Government. In its manifesto, Labour prioritised maintaining current stamp duty exemptions for first-time buyers.
“However, these are set to expire next April which could create uncertainties. If the Government does not extend the higher threshold, first-time buyers could face significant tax increases.
“Whatever it decides, though, the new Government must ensure it consults with the industry first.
“The sector needs to time to prepare for change rather than having last-minute announcements sprung upon us.
“As the new Government beds in, our focus at Movera will continue to be on supporting those looking to move or remortgage to make the homebuying experience as easy as possible.”
Ben Beadle, chief executive of the National Residential Landlords Association:
“We congratulate Labour on its election to office.
“The party’s manifesto committed to fundamental reforms to the private rented sector. This includes ending section 21, ‘no explanation’ repossessions.
“We stand ready to work constructively with the new government to ensure changes are fair and workable for tenants and responsible landlords and are sustainable for the years to come.
“It is vital however that reform does not make worse an already chronic shortage of rental properties to meet demand.”
Nicky Stevenson, managing director at national estate agent group Fine & Country:
“Buyers and sellers should be assured by today’s results that the property market is likely to remain robust in the coming months. Further buoyancy in the housing market is expected once the political climate settles.
“Election periods usually cause a hiatus in market activity, but that has not been the case this time around. While there may be some question marks remaining over taxation, the housing sector has shown resilience.
“It is going to be very interesting to see how the new Labour government injects some fresh thinking into the industry, following several years of dramatic ups and downs in house prices and property transactions.
“The big promise is a renewed push on homebuilding, as well as a determination to get more first-time buyers on the property ladder. We welcome this news, so long as consideration is given to helping towns and villages put in the necessary infrastructure to cope with any flux in population.
“While house prices and transaction levels have plateaued this year, a shot in the arm for building and the likelihood of a base rate cut later this year could help to get more people moving into their own home.
“The prime property market has awakened from from its slumber in recent months – with ripples of a cautious recovery spreading across the landscape, particularly in Scotland and the East Midlands with positive annual growth of 10.3% and 1.2% respectively.
“Labour’s proposal to abolish non-dom status could impact the housing market by potentially increasing the number of properties for sale. High-net-worth individuals with properties in the UK may look to sell up if they are affected by the change in regulation, which would in turn expand the prime residential market even further.
“Only about 0.1% of the population has non-dom status, implying a limited overall effect. It is also worth noting that most of the people affected are likely to be based in London.
“The new prime minister has been very careful in his wording on taxes, making sure to not rule out any changes to Capital Gains Tax or Inheritance Tax, both directly affecting the property industry.
“Overall, there is room for cautious optimism for the rest of the year and the property and financial markets will benefit from a decisive majority for the government, as opposed to the instability that could have loomed with a hung parliament.”
Simon Webb, managing director of capital markets and finance at LiveMore:
“’Landslide victory’ are the clear watchwords for this election. But as Labour settles in the new watch word will need to be affordability.
“Labour’s manifesto prioritised maintaining current stamp duty exemptions for first-time buyers but has made no mention of extending this exemption to other buyers.
“Leaving older buyers trapped in large houses they can’t downsize from and locking younger buyers out.
“Regardless of how the new government plans to address the housing crisis, it is crucial that they listen to the industry first for guidance.
“At LiveMore we will be focusing on providing well-informed advice to older borrowers, helping them to capitalise on any opportunities presented by this new Government.”
Simon Gerrard, managing director of Martyn Gerrard Estate Agents and Past President of the National Association of Estate Agents (Propertymark):
“A number of significant challenges lie ahead for the Labour party if they are serious about fixing our broken property market.
“As the Conservative Party’s time in government comes to an end, we are possibly the furthest away from being a home-owning democracy than we have ever been, and we are in desperate need of strong and effective leadership.
“Reforming our planning system simply must be at the very top of the new housing secretary’s list of priorities, and I hope that we quickly see new policy introduced to facilitate the building of new homes in urban areas, where they are most desperately needed.
“The policies and pledges that the Labour party has issued in the run up to the election have shown promise, but it is imperative that they follow these up with strong action. As always, the devil is in the detail, so it is vital that any further policy announcements from the government really have meat on the bones.
“The government must also take the time to properly consider the outcomes and consequences of any policies it introduces, and to listen to voices from the industry so that policy actually addresses the real challenges we are facing, rather than creating new ones.
“A huge amount of frustration for those of us working in the property sector with the previous government was that we were frequently offered soundbite policies that were not properly thought through, and which were never acted on because the government was simply pandering to its backbenchers and local councils. These are mistakes that the new government cannot afford to make.
“In the home-buying market, the Labour party must also address the much-bemoaned stamp duty regime as a matter of urgency, ideally by reversing the tax so it is paid by the seller, whilst scrapping it entirely for downsizers.
“Freeing up homes for second-steppers and improving the affordability of moving is crucial to breaking the bottleneck that has constricted the property market under the previous government’s watch.
“Whether the Labour party will offer viable solutions to the many problems that plague the housing market remains to be seen, but I hope that it seizes the opportunity that lies ahead of it.”
Amanda Symes-Reeves, product manager at MPowered Mortgages:
“We are encouraged by Labour’s plans for building a new generation of new towns, fast tracking the approval of brownfield sites, and releasing some “low quality” green belts for new developments. If they can crack this, then this will have a positive impact by helping more people on the ladder.”
“Labour have a proven track record of success with housing building so let’s hope they can live up to this and deliver on their promises.”
“In 1967, the then Labour Government designated an area of over 21,000 acres covering the northernmost part of Buckinghamshire to become the United Kingdom’s biggest new town – “Milton Keynes”.
“New towns, which are well planned with a full suite of amenities and services such as schools, hospitals, doctor surgeries and recreational areas will both provide new jobs and homes that will stimulate the economy and have a positive impact Nationally.”
“We are also keen to see the reimposition of building targets on local authorities to ensure that Labour meets its promise to build 1.5 million new homes over the next decade.
“As part of this, we would also like to see the ability of local authorities to share in the reward of housing building in their areas to allow them to invest in local infrastructure and also in the social housing sector.”
Stephen Haddrill, director general of the FLA:
“When the electorate’s expectations are high, but the government’s coffers are low, growth is the only option.
“This must be a concerted effort – a partnership where Government creates the right environment for growth so that lenders can finance investment, and businesses can do what they do best – generate wealth and employment.
“That environment will not happen by chance. The FLA’s Manifesto sets out the necessary improvements to regulation, access to finance and preparations for a greener future.
“Once the key Ministerial positions are confirmed, we will be re-establishing contact to continue discussions that began before the General Election.”
Matt Harrison, sales director at finova Payment Services:
“If handled right Labour’s landslide victory could boost lender confidence in the housing market.
“Their manifesto promises significant investments in housing and measures to increase supply, which could lower borrowing costs and create a more stable market.
“But it’s no secret that new governments have consistently fallen short on housing pledges, and Labour’s proposed mortgage guarantee is estimated to help only 5% of first-time buyers annually. It will be interesting to see if they can deliver on these plans to revive the spluttering housing market.
“At finova Payment Services, our focus remains on supporting buyers with consistent guidance in these changing times.”
Dan Wilson Craw, deputy chief executive, Generation Rent:
“It is encouraging that the new Prime Minister recognises how central our homes are to our lives. Unfortunately, private renters know this only too well.
“Our homes cannot offer the security we need if we can be evicted at a landlord’s whim. Homes can’t provide hope if landlords can ignore tenants’ requests for repairs.
“In its manifesto the Labour party promised to abolish Section 21 evictions immediately. Today Mr Starmer promised urgency.
“After an entire Parliament with nothing to show for renters, this must now mean a new Renters Reform Bill announced in the Kings Speech, with security of tenure, affordability and higher standards at its heart.”
